The USD/ZAR once again came within sight of the 15.00000 mark yesterday before seeing a slight reversal lower. However unlike the highs seen on the 26th of July when the USD/ZAR also came within shouting distance of 15.00000, yesterday’s move didn’t produce a violent reversal lower. The technical notion that support remained rather durable yesterday near the 14.84000 ratio may be a warning sign the USD/ZAR could traverse higher near term.
Technically the USD/ZAR has not been able to escape from its mid-term bullish trend and although the previous week did show momentary signs of selling action becoming stronger, the forex pair has clung onto a rather steady and progressive upwards climb since the 4th of August. After the initial social unrest hit South African communities last month the USD/ZAR experienced a wave of buying, but then demonstrated an ability to move lower. However, the climb higher the past two weeks indicates that technical and fundamental perceptions may be merging and causing more nervous buying.
While bullish speculators may be looking at the 15.00000 level as a potential target for the USD/ZAR, they are warned not to get overly ambitious particularly if they are using a large amount of leverage. The USD/ZAR is still experiencing reversals lower and although support levels have certainly been increasing the past two weeks, this doesn’t guarantee moves lower can be negated.
As of this writing the USD/ZAR is traversing the 14.90000 juncture and this level could prove to be important. If the USD/ZAR is able to sustain its current values and continues to test the 14.93000 to 14.95000 junctures it may be an indication that 14.98000 will be challenged again.
The 14.98000 region has proven a substantial resistance level the past month when the 15.00000 mark has come into sight, but if it is punctured higher the USD/ZAR could certainly experience another dose of buying. Previous to the highs reached in late July and yesterday, the last time the USD/ZAR traded above 15.00000 was in late March.
If the trend is truly the friend of traders, current conditions in the USD/ZAR point towards speculative buying positions being wagered. Traders should use stop losses and current support levels, which are relatively close with the 14.87000 to 14.83000 junctures could prove adequate places to protect long positions.
South African Rand Short Term Outlook:
Current Resistance: 14.95000
Current Support: 14.83000
High Target: 15.01000
Low Target: 14.76000
